A late car payment will lower your credit score, and the damage starts quickly

A late payment is any car payment that arrives after the due date shown on your bill. Most lenders report late payments to the three major credit bureaus — Equifax, Experian, and TransUnion — once you are 30 days past due. That report stays on your credit report for seven years, even after you pay it back.

The timing matters. A payment that is one day late may not be reported yet, but many lenders charge a late fee when ready. A payment that is 30 days late will almost certainly be reported to the credit bureaus and will lower your credit score. The longer you stay behind, the worse the damage: a 60-day late payment hurts more than a 30-day one, and a 90-day late payment hurts more still.

Your credit score is a number between 300 and 850 that lenders use to decide whether to lend you money and at what interest rate. The lower your score, the higher the rate you will pay on future loans. A single late payment can drop your score by 100 points or more, depending on how high it was before and how late the payment is.

Key Takeaways

  • Late payments are reported to credit bureaus once you are 30 days past due, and that report stays for seven years.
  • A late payment lowers your credit score when ready upon reporting, often by 100 points or more depending on your score and how late the payment is.
  • The longer a payment stays late, the more damage it does — a 90-day late payment is worse than a 30-day one.
  • Paying the late amount as soon as you can stops additional damage, but does not erase the late payment from your credit report.
  • If you know a payment will be late, contacting your lender before the due date may allow you to arrange a different payment schedule.

How credit bureaus record late payments

When you miss a car payment, your lender does not report it to the credit bureaus right away. Most lenders wait until you are 30 days past due before they send the information to Equifax, Experian, or TransUnion. This means a payment that is 10 or 20 days late may not show up on your credit report yet — but you will likely be charged a late fee, and interest will keep building on the unpaid amount.

Once the lender reports the late payment, it appears on your credit report as a "30-day late," "60-day late," or "90-day late" depending on how far behind you are. Each of these stages is worse than the last. The credit bureaus do not remove the late payment when you finally pay it; they just mark it as paid. The record itself stays on your report for seven years from the date you first missed the payment.

Your credit score is calculated using information from your credit report. Late payments are one of the biggest factors — they carry more weight than almost anything else except whether you have unpaid debts in collections. This is why even one late payment can cause a significant drop in your score.

The difference between 30, 60, and 90 days late

A 30-day late payment means your payment is more than 30 days overdue. This is the first stage that most lenders report to the credit bureaus. Your credit score will drop, but the damage is less severe than if you stay late longer.

A 60-day late payment means you are more than 60 days behind. At this stage, your lender may send you a formal notice warning that they may repossess the car if you do not catch up. Your credit score drops further, and the late payment record becomes more damaging to your ability to borrow money in the future.

A 90-day late payment or longer puts you at serious risk of repossession. Your credit score takes the heaviest hit at this stage. A 90-day late payment is treated as a major delinquency and will make it very difficult to get approved for new credit, a mortgage, or even a rental apartment for the next several years.

The key point: the sooner you pay, the better. Paying a 30-day late payment stops it from becoming a 60-day late payment, which stops it from becoming a 90-day late payment. Each day you wait allows the damage to grow.

What happens to your credit score after a late payment is reported

The exact drop in your credit score depends on two things: how high your score was before the late payment, and how late the payment is. Someone with a score of 750 may see a drop of 100 points or more from a single 30-day late payment. Someone with a score of 650 may see a smaller drop in points, but the damage is proportionally worse because they have less room to fall.

The damage is not permanent, but it is long-lasting. Your credit score will begin to recover once you catch up on the late payment and stay current going forward. However, the late payment record itself will remain on your credit report for seven years. This means lenders will see it for seven years, even though its impact on your score will gradually weaken over time.

After about two years of on-time payments, the late payment will have much less impact on your score. After five years, it will have even less. But it will still be visible on your report, and some lenders will still consider it when deciding whether to lend to you.

How to stop the damage if a payment is already late

If you have missed a payment, the first step is to pay it as soon as you can. The longer you wait, the more damage occurs. Even if you cannot pay the full amount, paying something shows your lender you are trying to catch up.

Contact your lender directly before the next payment is due. Explain your situation honestly. Some lenders will work with you to set up a new payment plan, skip a payment, or extend your loan term to lower your monthly payment. These options are not may provide, but many lenders prefer to work something out rather than repossess the car.

Do not ignore the late payment and hope it goes away. Lenders will keep trying to collect, and the longer you ignore them, the closer you get to repossession. Once a car is repossessed, the damage to your credit is even worse, and you may still owe money after the car is sold.

Preventing a late payment before it happens

If you know your payment will be late, call your lender before the due date. Explain that you are having trouble making the payment on time and ask what options are available. Some lenders will defer a payment, meaning you skip one month and add it to the end of your loan. Others will let you make a partial payment to show good faith while you arrange the rest.

Set up automatic payments from your bank account if you can. This removes the risk of forgetting to pay. Even if you do not have enough money in your account on the due date, you will at least know when ready rather than discovering weeks later that the payment bounced.

If you are struggling to make your car payment every month, talk to your lender about refinancing — taking out a new loan to pay off the old one with a longer term and lower monthly payment. This will lower your monthly cost, though you will pay more interest overall. It is better than falling behind and damaging your credit.

Late payments and repossession

A late car payment can lead to repossession if you do not catch up. Most lenders can legally repossess your car once you are 60 to 90 days late, depending on your loan agreement and your state's laws. Repossession is worse than a late payment because it shows up on your credit report as a major delinquency and makes it very hard to borrow money for years.

If your car is repossessed, the lender will sell it and explore the money to what you owe. If the car sells for less than you owe, you may still be responsible for the difference — called a deficiency. This debt can be sent to a collection agency, which will damage your credit even further.

Repossession is also expensive. You will have to pay the towing and storage fees to get your car back, and those fees can be hundreds of dollars. The best way to avoid repossession is to stay in contact with your lender and pay as soon as you can.

Frequently Asked Questions

How many days late does a payment have to be before it shows up on my credit report?

Most lenders report to the credit bureaus once you are 30 days past due. A payment that is 10 or 20 days late will not show up on your credit report yet, but you will be charged a late fee and interest will continue to build. Once it hits 30 days late, the lender will report it.

Will paying a late payment remove it from my credit report?

No. Paying the late payment stops additional damage and shows future lenders you caught up, but the late payment record stays on your credit report for seven years. It will be marked as paid, but it will still be visible to lenders and will still affect your credit score, though the impact weakens over time.

Can I get a late payment removed from my credit report early?

You can try asking your lender to remove it, especially if you have a good payment history otherwise and this is your first late payment. Some lenders will do this as a courtesy, but they are not required to. You can also dispute it with the credit bureau if you believe it is reported incorrectly, but disputing a late payment that actually happened will not succeed.

What should I do if I cannot afford my car payment?

Contact your lender before the payment is due. Ask about deferment, a payment plan, refinancing, or a loan modification. If you cannot afford the car at all, you can also return it to the lender voluntarily, though this will still damage your credit. Do not straightforward stop paying — that leads to repossession and worse credit damage.

Does a late payment hurt my credit more than other negative marks?

Late payments are one of the most damaging things on a credit report. They carry more weight than most other negative marks except for accounts sent to collections or a bankruptcy. This is why even one late payment can cause a significant drop in your score and why staying current is so important.